The Portfolio Committee on Communications and Digital Technologies in Parliament has called on minister Solly Molatsi to urgently establish a ministerial intervention team (MIT) to save the South African Post Office (SAPO).
This comes amid revelations the so-called “day zero” scenario is still in sight, including that SAPO’s modernisation plans, among others, have been put on hold.
Day zero – set for 30 October – is understood to be the day when the ailing national postal service is expected to run out of cash reserves required for its operations.
The state-owned entity has been in dire financial straits and its once wide branch network has significantly shrunk over the years. SAPO, which is under business rescue,seeks another bailout to the tune of R3.8 billion from National Treasury.
This week, SAPO’s business rescue practitioners (BRPs), joined by deputy communications minister Mondli Gungubele, briefed the portfolio committee and laid bare the ailing entity’s troubles.
While noting some practitioners work to achieve short- to medium-term objectives, including reducing approximately R1.2 billion in annual employee costs and right-sizing the entity, the committee says it’s “gravely concerned” about the business rescue process at SAPO.
The committee expressed dissatisfaction with the presentation, reaffirming its position that the BRPs failed to present a cogent business case for SAPO’s long-term sustainability in line with their statement of intent at the start of roceedings, to ensure its “stabilisation, survival and future-proofing”.
According to the committee, the practitioners were appointed to implement a three-legged mandate of rescuing, stabilising and ensuring the long-term commercial viability of the post office.
However, during the briefing, they said nothing about the plan to future-proof SAPO, except to say that they needed R3.8 billion from the fiscus, it commented.
Says the committee: “This money [will be] used to pay the final tranche of the retirement packages to employees, meet obligations with payroll creditors, and the remainder for capital and operational expenditures.
“To access the desired cash draw down from the fiscus, the business rescue process should clearly demonstrate the path to viability and sustainability beyond this requested bailout.”
As a result, the committee is of the view a ministerial intervention team (MIT) must work with the business rescue practitioners and National Treasury, among others, to develop a strong business case to save and restore the post office.
“The MIT should, among other actions, urgently convene stakeholders and other industry players in the postal services, courier and e-commerce sectors to engage on proposals towards strategic, sustainable and value-creating private sector partnerships.
“Due consideration should also be given to exploring opportunities to leverage SAPO’s extensive property assets for retail, residential and student accommodation purposes.”
To also support this process, the committee says it will engage with its counterparts in Parliament to aggressively enhance support for SAPO by the rest of government.
Furthermore, it shall seek a joint meeting with the Standing Committee on Finance to explore any available measures that can be put in place to salvage the situation.
“No effort must be spared to rescue and revive the South African Post Office as a vital state institution with an important mandate to connect people to one another and to the government in a fast-evolving technological age,” it states.
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